Alabama budget cuts coming with end of federal pandemic funds; more efficient state government should next be on tap
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Eye on Politics
Paul DeMarco
There is an important deadline coming up for Alabama and other states at the end of December. The American Rescue Plan’s State and Local Fiscal Recovery Funds, which provided federal monies to the states during the pandemic, is coming to an end.
The past three years each of the states have gotten an enormous influx of funds from Congress to use based on the losses from COVID-19. Now the states must ensure those funds are obligated no later than this December 31.
All of the monies have to be expended by December 31, 2026. Alabama was appropriated some $2.1 billion to spend from the COVID funds. Of that amount, some $1.2 billion has already been utilized.
Gov. Kay Ivey and the Alabama Legislature allocated its funds for a variety of programs, including healthcare providers, water and broadband infrastructure and state prisons. A lot of that money has been used to prop up state budgets, but all of those dollars must be required to be expended no later than the next two years.
Thus, Alabama leaders will be looking next year at tightening the state budgets to make up for those millions of dollars that will no longer be part of the equation.
The incoming Trump administration is already looking at how to also cut federal spending. Right out the gate, the Department of Government Efficiency, the outside advisory council to President-elect Donald Trump, is working on recommendations on how to slash government spending.
Some of what may occur is funding cuts to federal agencies and those monies returned to the states in block grants to administer themselves. Alabama could be the recipient of millions of dollars, with the requirement that they be more efficient and accountable than they are now spent at the federal level.
Alabama leaders need to follow Trump’s lead and could also look at how to reduce the size of state government, implement fewer regulations and how to cut state budgets.
One area state leaders could look at to save taxpayers’ money is examining state properties both owned outright and those that are leased. The list of such properties is long and deserves serious study on what should be kept and what should be sold. In addition, state leases should be looked at to ensure the terms and payments are fair to the citizens of Alabama.
The new year is around the corner, and so is the next legislative session. Alabama leaders have opportunities to fund state priorities and make sure state budgets are more efficient in 2025, with or without the federal funding.
Paul DeMarco is a former member of the Alabama House of Representatives and can be found on X, formerly Twitter, at @Paul_DeMarco.